Add IRS to the list of agencies looking the other way
Here’s an example of a story that can be told many ways. The AP Headline reads:
"Historic collapse" of IRS audit rates of big companies
The tax audit rates of the largest companies are less than half what they were 20 years ago while more small and midsize businesses are coming under scrutiny, according to an organization that monitors the Internal Revenue Service.
The Syracuse University-based Transactional Records Access Clearinghouse (TRAC) described what it said was a "historic collapse" in audits for corporations holding assets of $250 million or more. About 26 percent of them were audited in the 2007 budget year compared with 34 percent in 2006 and 43 percent in 2005.
The IRS did not dispute the numbers, based on agency data. But it strongly disagreed with suggestions it was easing oversight of the biggest corporations.
Enforcement revenues from large companies rose by one-third in 2007 from the previous year, from $10.6 billion to $14.2 billion, said IRS Deputy Commissioner Barry Shott, who heads the Large and Mid-Size Business Division.
TRAC said that last year the government uncovered $682 in additional recommended taxes for every revenue agent hour spent auditing the smallest corporations, compared with $7,498 in additional taxes for audits of the largest corporations.
So one version of the story is that there are practically no audits of large companies going on: Yet another example, along with the FAA, FDA, FTC, and many others, that have left the playing field to the big companies.
Another version says it’s like Goldilocks . . . just the right number of the right firms. The number you have to at least notice is the difference in revenue recovery between audits of small vs. large companies (unquoted are statistics showing that audits of small companies have gone up substantially, the better to pad numbers with my dear). It think it’s safe to say that the decision process being used here is not the one being discussed publicly.
Tags: IRS, Audit, TRAC, Transactional Records Access Clearinghouse, Decision Making, Decision Quality
